Terabyte plans viable on NBN, says NBN Co

Terabyte plans viable on NBN, says NBN Co

Summary: High downloading internet users should not expect to pay more on the National Broadband Network (NBN), as the retail service providers (RSP) will offset costs with customers who don't use as much, according to NBN Co's head of product development Jim Hassell.

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TOPICS: NBN, Broadband, Telcos
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High downloading internet users should not expect to pay more on the National Broadband Network (NBN), as the retail service providers (RSP) will offset costs with customers who don't use as much, according to NBN Co's head of product development Jim Hassell.

Jim Hassell

NBN Co's Jim Hassell
(Credit: Josh Taylor/ZDNet Australia)

RSPs such as Internode have previously flagged that providers would not be able to offer the 1TB plans available today on the NBN due to the NBN Co's composite pricing model, which charges for bandwidth usage as well as for basic wholesale access.

However, speaking to ZDNet Australia after his presentation at CeBIT Australia in Sydney this afternoon, Hassell said that it should be no different for RSPs to manage these costs as they do today.

"The service providers will contend it and manage it with the NBN exactly as they do today," he said. "I think service providers have given us feedback and are worrying about things in the future that they're guessing on because they're not laid out at the moment."

Hassell said it was unlikely the pricing model would change in the near future, but that it would be tweaked if circumstances became different.

"It's not a static thing. We built the corporate plan on ... a robust set of assumptions, but as things change you do change things," he said. "If we find that take-up and usage is way in excess of our expectations ... that will just bring the price down more quickly. It's a straight-forward relationship."

He said that the NBN pricing was determined to be as low as possible to get as many customers on board.

"You're trying to encourage them onto it and you're trying to encourage them to use the speed that it gives, which is quite significant. You want people to get onto it but not at the [12Mbps/1Mbps] level, you want to get them using 25/5 or 50/20 service."

He said he understood Internode founder Simon Hackett's concerns about pricing, but noted that Hackett was also keen to be at every release site for the NBN.

Armidale's seven customers

Hassell addressed criticism from the Federal Opposition that just seven customers had been trialling the service at the launch of the NBN in Armidale earlier this month, saying the launch was specifically a trial to test the network, and that NBN Co needed customers who were prepared to be guinea pigs.

"We're really testing the network. The quality of service, the reliability, that we're able to recover in the event of an issue, and we'll make some of those issues happen so we can recover," he said. "That's why I say it is a pilot because you need to get some people who are quite OK while you run through that pilot.

"It's a pilot, it's deliberately designed to be low numbers while we complete that."

Topics: NBN, Broadband, Telcos

About

Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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24 comments
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  • Wait for it... here come the FUDsters with a Quigley/Alcatel like, mudslinging assault on Mr. Hassell, now...sigh!
    Rizz-cd230
  • That's ok, I'm sure you supplement your income by pimping your dignity rentboy!
    mwil19-a34f7
    • See...LOL...!
      Rizz-cd230
  • Yeah tell me again how monopolies lower prices :) That one is always good for a giggle.
    mwil19-a34f7
    • Umm wanna go around again, just to prove my imbecile prophecy 100% correct again...

      To reiterate... (from above) - it really is a shame I don't actually get paid, especially by the comment, because with hurtin' imbecilies (not mentioning any names - ((although you may rightfully and obviously add your's here... now)) willing to mindlessly hang off every word I write and respond at my will, I'd make a fortune... LOL!!!

      kaaaaaa-chiiiiinnnng....LOL!
      Rizz-cd230
  • Ignoring the never ending FUD & nonsense constantly trolled on this site, I have to wonder what planet Mr Hassell is on! The RSP's will gouge every dollar they can from the NBN users.
    I'm just your average user. I have a 30GB plan with ADSL2+ @ ~20Mbps which I never exceed even when I download a video or two! My ISP is now offering VOD which will serve all my entertainment needs & it is very reasonably priced compared to the gouging Telstra/Foxtel impose on it's unsuspecting users (victims) who trust them (poor soles!) so why would I want to spend more on an NBN connection for more than I am already paying?

    My router is already fully paid for, I use VoIP which is dirt cheap, so there is no way I am going to consider investing more money for something which I may never use, just to save a few seconds in my download.
    I've no doubt there are business uses which will jump on board as soon as it's available & that's a good thing if it makes them more competitive on the world stage, but since they are already blocking all attempts I've made to purchase first release movies from US sites (US citizens have access) and more recently my attempt to purchase electronic & clothing goods from US sites, because they are less expensive, I don't see the NBN ever being able to overcome the marketing nonsense we have to try & circumvent to buy goods at a reasonable price.
    Australia is fast becoming (if not already) the most expensive country to live in & the NBN isn't going to help as long as the millionaires & business moguls control our purchasing power with the use of cartel operations. I see Telstra is now attempting to buy out Austas which is successful will give them monopoly control of almost all entertainment in this country.

    Is the ACCC or the NBN going to put a stop to the barriers we have to jump over, or prevent the cartels, which will allow the average person to achieve a level playing field... I doubt it!
    Huntsman.ks
    • Keith,
      Under the HoA, you won't have an option to stay on your copper ADSL connection,the copper network is to be decommissioned and ripped from the ground,so its either NBN connection via your current RSP or another,OR NO CONNECTION AT ALL,once the coppers gone,
      pete196600
    • Wow, ADSL2+ at ~ 20Mbps, do you live inside a Telstra exchange or something.

      Mine is lucky to sync at 6Mbps. I think the performance you are talking about is nothing close to typical.

      I got to say I'm looking forward to being able to have a faster service than what is currently possible for me over ADSL2+ and I'm pretty sure I'm not the only one.
      Steve123-b6932
      • I live within sight of the local exchange. Between my front door and their front door is ONE corner. I should be getting as fast a speed as is realistically possible, yet that 24 Mbps is lucky to sync to 6 Mbps as well.

        20 Mbps is never a typical connection.

        Take that out of Keiths message though, and a lot of what he says is typical of a lot of connections. But that doesnt mean its going to be the typical needs in 5 or 10 years from now.

        Rewind 10 years, and all the negative comments being made about the NBN were being made about ADSL - "why do you need a 1.5 Mbps connection when all you need it for is email and web browsing?" or "the only people that need a 1.5 Mbps speed is all the people illegally downloading music"...

        Come back to today, and how many people could operate on a 56k modem? I got shaped a month or so back, and the speed was horrendous, as you'd expect. Even something as basic as Facebook was a slug.

        Point being, our needs grow. We might not see a practical day to day need now, but 10 years ago the needs were vastly less, and we've grown to what we have today.

        Bigpond boasted about its entry level options only 5 or so years ago - 200 meg per month for "just" $30... For ADSL. The cheaper ISP's had 10 gig a month for $60. Now, Keith is satisfied with "only" 30 G/m.

        In 5 years you will "only" need 100 gig, in 10 years "only" 200 gig... The negative nannies will always look at the minimum of the day, rather than realise the minimums of the past show our lowest needs are always growing.
        Gav70
        • Gav,

          I live 2.0-2.5 KM from the exchange and get 13MBps effective speed. Contact Telstra and tell them you have "noisy line".
          Jules_01
  • My previous reference to the cartel proposal of Telstra/Foxtel/Austas was due to a typing error. I of course meant Telstra/Foxtel/Austar. See Renai LeMay's report & the CEO of Optus, Mr O'Sullivan's very real concern.
    I also said "is successful" intentionally. Unless Conjob & the ACCC wake up, it will be a done deal!
    Huntsman.ks
    • Hi Keith, you highlight many pertinent points...

      However, if I recall (and correct me if I'm wrong) you used to be one of Telstra's harshest critics at places like these, pleading for something to be done about Telstra's stranglehold on Australia's comms...

      Yet here we are with something finally being done, exactly as you asked (as well as an update to our nations comms, for the future) and now... you are happy with the status quo after all?
      Rizz-cd230
  • A nice lot of spin, 7 Armidale users is a good thing? And I see the masses will be required to subsidize the nerds!
    Knowledge Expert
    • The "masses" are subsidising the "nerds" right now - which is exactly what Jim Hassell is saying.

      But why allow a few facts cloud over the FUD, right?
      mwyres
  • I suppose they could have trialled it on a much larger number and then if they found a glitch and had to rectify it, you could have criticised them for wastefully, not trialling it on a smaller scale...!
    Rizz-cd230
  • Here's the thing. The NBNCo pricing model charges $20 + GST per megabit of circuit capacity between a home and each of the regionally distributed NBNCo points of interconnect.

    The equivalent cost in a modern dark fibre backhaul'd ADSL2+ deployment is in the $1-$2 per month range.

    It stands to reason that if a key cost factor is raised by 10-20 times compared to the current real world costs, that this will make it very hard to maintain an expectation that retail pricing on a new network like this, where government policy demands that consumers pay for the network through their retail fees will necessarily track retail pricing on an existing network using old copper assets that have been long since paid for in the Telstra network.

    The key thing here, though, is this - its actually not appropriate for NBNCo to make definitive statements about what RSPs will charge, because thats up to RSPs, for whom NBNCo's costs are merely one cost input to a complex mix.

    Just like it is, obviously, not up to RSPs to decide what NBNCo will charge as a cost input, because thats clearly being driven mainly by government policy about making sure the costs fully fund the total build cost of the network.

    But its important to appreciate that the CVC charge is far above the real costs of that component of the service, and that this -will- of necessity push back on the shape of retail plan costs at high download levels.

    Jim's comments appear to be about the technical aspects of the service, but these do not map to the retail costs of a sustainable 'terabyte plan' on that network - not with a CVC cost thats an order of magnitude above current levels in the market, at least.
    simonhackett
    • There are a number of alternate aspects to Simon’s comment…and before we start, I have utmost respect for Simon/Internode. As such here, I am generally relaying “my opinion”, not bagging Simon or Internode.

      1. Perhaps, the present costs for ISP’s are, due to the artificial/pseudo competition/access laws re: Telstra’s network (and coming from one who has been claimed a disparaging Telstra opponent) underpriced, just as much as the NBN costs are said to be overpriced?
      2. As such, perhaps ISP’s have had it too good for too long, having only passed on the benefits, when forced to, with the advent of the NBN. This leads to…
      3. The fact that NBNCo are talking about RSP’s charges to clientele, may stem from the fact that if left to their own accord (as witnessed pre-NBN) RSP’s will charge as much as they can get away with. As such, whilst previously screaming about Telstra’s gouging, I bet ISP’s loved them gouging. Because all they then did was undercut Telstra marginally, still profited handsomely and looked like the good guys!
      4. NBNCo have (apparently) given RSP’s pricing assurances. But let’s be realistic, new technologies do in fact cost more initially and come down as those involved receive a ROI on the investment.
      5. Being so, NBNCo seem to recognise Simon’s concerns and have said repeatedly that if access costs are inhibitive they will be reviewed and if need be altered! Obviously this may mean a longer payback period, but the idea of the NBN isn’t that of an exclusive financial investment, it’s an infrastructure build. So if it takes an extra year, 2, 5 to pay it self back, who (apart from blind naysayers) cares?
      6. Whilst pertinent points, I believe this is a storm in a tea cup, for most, but a concern only really for ISP’s who are of course positioning themselves to ensure maximum profitability from the NBN. being so, they are preparing us, the customers, for them trying to do so. Whereas NBNCo are looking to ensure, the NBN is all it is claimed to be, with “average Aussies, not profits, coming first…”!
      Rizz-cd230
  • Uh, this is massive trip

    Light users subsidize heavy users right now. The difference with the NBN is that the cost to the ISP's per mbit of data delivered is 10-20x higher then what it is currently.

    So unless NBNCo is predicting a massive spike of light users hundreds of factors higher then what is available currently, what they are saying is tripe
    deteego
  • Can't wait for the reality to hit the 'users'/'broadband enthusiast' should this thing ever get off the ground and into their premise.

    If you are smart, you want to be the last person on fibre paying top dollar for a service you won't be able to leverage or afford.

    As I have always said, they "Talk big, pay low", the worst type of customer that leaves you no margin, and in fact the ones you want to get ride of. In addition, the biggest whingers and poorest understanding of telco, except their belief its their God dam right to get 'broadband' for free or for little cost.
    Theguy-bbb4a
  • Theguy…

    I can’t recall anyone here every demanding broadband for free, that’s your own typically biased, assumption.

    So perhaps you fit in the "talk big, think low"...category!
    Rizz-cd230